Eight of 10 Southwest Florida banks make profit

Bank of Commerce and Sabal Palm only ones in the red in the first quarter

By JOHN HIELSCHER

Eight of Southwest Florida's community banks kicked off the year with increased profits, but two continued to lose money.

Of the 10, The Bank of Commerce and Sabal Palm Bank, both headquartered in Sarasota, were the only local banks in the red in the first quarter of 2013, according to just-filed financial reports.

Bank of Commerce has been unprofitable for four consecutive quarters, while Sabal Palm is on a two-quarter skid.

The region's community banks have mostly worked through an economic downturn in which nine local banks failed from August 2008 to July 2011.

The survivors say lending activity has picked up, which will, in turn, help boost future earnings.

Sarasota's Gateway Bank is experiencing just that phenomenon. It posted a profit of $563,000 in the first quarter, up from $492,000 in the same period the year before.

President and chief executive officer Shaun Merriman says lending has been "robust," with $3.4 million in new loans in the quarter and $12.1 million over the year.

"Competition for loans is heating up, and many banks are lending," Merriman said.

Conversely, Bank of Commerce lost $93,000 in the first quarter, compared with a year-ago profit of $435,000 that was fueled by securities sales. It is the region's only undercapitalized bank, and it has been trying for nearly two years to raise fresh capital.

The bank has $7 million in nonaccural loans and $16.1 million in real estate properties, known as ORE, which it owns as a result of soured loans that have dragged down earnings.

To right itself, executives say they plan to shed those properties.

"A major focus of this year is getting rid of ORE properties," said Bank of Commerce CEO Charlie Murphy. "Certainly, the improved real estate market in our community will help us sell the bulk of these properties this year."

Sabal Palm lost $91,000 in the quarter, compared with a profit of $22,000 one year earlier -- earnings that also were bolstered by securities gains.

CEO Neil McCurry, who took over in February after bringing in $5 million in new capital, said the bank had one-time expenses related to the capital influx and to its new growth plan.

"The good thing is that, since the beginning of the year, our loans have increased 16 percent," he said. "Many of the people we talk to, small businesses and entrepreneurs, are looking to expand their businesses."

Charlotte State Bank & Trust of Port Charlotte was the region's most-profitable bank in the first quarter, with $895,000 in earnings, up from $607,000 last year.